Crapo: Job-Killing Tax Hikes will Hurt Middle Class, Help China
Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, delivered remarks on the Senate Floor today on the Democrats’ $3.5 trillion reckless tax-and-spending bill. In his speech, Crapo says the efforts to reimagine America by imposing crippling tax hikes will stunt our economic recovery, further impede labor markets, and punish low- and middle-income workers with higher prices for everyday goods and services.
On business tax hikes:
A higher corporate tax rate would result in lower wages and reduced benefits; hit the nest eggs of everyone saving for retirement; and force consumers to pay more for everyday necessities.
Hiking the rate indisputably hits the middle class. Estimates suggest workers shoulder up to 70 percent of the corporate tax burden.
And a recent analysis performed by the nonpartisan Joint Committee on Taxation says the burden on over 98 percent of Americans who make less than $500,000 a year increases over time. Let me make that clear: 98 percent of the increase that is felt by labor, falls on those making less than $500,000 per year, and the vast majority of that on those making less than $400,000 per year.
On plans to impose hundreds of billions of tax hikes on businesses operating across the globe:
These pro-China tax hikes would raise the relative cost of doing business in America and punish American businesses selling products or services overseas, reigniting inversions and foreign acquisitions.
On individual tax hikes:
Democrats also want to increase the top individual tax rate to 39.6 percent from 37 percent, a rate that kicks in at $400,000 for individuals and $450,000 for married couples. This includes a supercharged marriage penalty, as unmarried couples can earn almost a million dollars a year without being subject to increased taxes.
Democrats have also proposed increasing the number of Americans subject to the original death tax--including farmers and small business owners. Others are pushing for a double death tax by eliminating the step-up in tax basis entirely.
On IRS bank reporting requirements and Americans’ privacy:
Less noticed are some of the plans to drastically expand the powers of the Internal Revenue Service (IRS) and turn banks and credit unions into private investigators for monitoring law-abiding Americans.
The threats to privacy and invasion of compliant taxpayers’ personal financial affairs are staggering.
On proposals to stifle innovation in health care:
Democrats are also proposing sweeping government price controls on the very innovators in our health care system who helped battle the pandemic by developing life-saving vaccines and therapeutics.
Their proposals could prevent scores of game-changing prescription drugs from coming to market in the years to come . . . in addition to driving up launch prices for new products.
Senator Crapo’s full remarks, as prepared for delivery:
The United States is experiencing unprecedented economic pressures, including significant inflation and record price increases, significant friction in labor markets, and intense international competition--all while the pandemic continues to threaten Americans’ health and our economic recovery.
Yet, Democrats want to move forward with their partisan $3.5 trillion reckless tax-and-spending spree that will likely stunt our economic recovery, further impede labor markets, and punish low- and middle-income workers with higher prices for everyday goods and services.
Democrats are currently debating just how high they want to increase taxes on American businesses and workers.
House Democrats have proposed to hike the corporate tax rate to 26.5 percent from 21 percent. This would return our combined corporate tax rate – at 31 percent – to one of the highest among developed countries.
Hiking the rate indisputably hits the middle class. Estimates suggest workers shoulder up to 70 percent of the burden.
And a recent analysis performed by the nonpartisan Joint Committee on Taxation says the burden on over 98 percent of Americans who make less than $500,000 a year increases over time. Let me make that clear--98 percent of the increase that is felt by labor, falls on those making less than $500,000 per year, and the vast majority of that on those making less than $400,000 per year.
Our Democratic colleagues argue these increases do not violate President Biden’s pledge, since they are not specific higher individual tax rates.
But hardworking Americans do not care about the distinction between a direct or indirect tax; they care about how taxes hit their pocketbooks.
A higher corporate tax rate would result in lower wages and reduced benefits; hit the nest eggs of everyone saving for retirement; and force consumers to pay more for everyday necessities.
This plan would also impose hundreds of billions in tax hikes on U.S. businesses operating across the globe, overwhelmingly rewarding our foreign competitors and making the United States, again, one of the highest taxing countries in the developed world.
These pro-China tax hikes would raise the relative cost of doing business in America and punish businesses selling products or services overseas, reigniting inversions and foreign acquisitions.
Democrats also want to increase the top individual tax rate to 39.6 percent from 37 percent, a rate that kicks in at $400,000 for individuals and $450,000 for married couples. This includes a supercharged marriage penalty, as unmarried couples can earn almost a million dollars a year without being subject to increased taxes.
Democrats have also proposed increasing the number of Americans subject to the original death tax--including farmers and small business owners. Others are pushing for a double death tax by eliminating the step-up in tax basis entirely.
Rather than be given time to grieve their loss, families could be forced to sell farms, businesses and homes just to pay Uncle Sam.
Less noticed are the plans to drastically expand the powers of the Internal Revenue Service (IRS) and turn banks and credit unions into private investigators for monitoring law-abiding Americans.
This financial dragnet will force financial institutions into reporting deposit and withdrawal flows--on as little as $600--on their customers’ accounts, exposing sensitive data to future breaches.
Whether the cutoff for monitoring transactions $600 or $10,000, Americans of all income levels would have their private financial activities reported to the leaky IRS.
The threats to privacy and invasion of compliant taxpayers’ personal financial affairs are staggering.
Democrats are also proposing sweeping government price controls on the very innovators in our health care system who helped battle the pandemic by developing life-saving vaccines and therapeutics.
Under the guise of negotiation, government bureaucrats would have the power to set prices for medications, devaluing the lives of the most vulnerable among us, including older Americans and those with disabilities.
Their proposals could prevent scores of game-changing prescription drugs from coming to market in the years to come – with one recent study projecting as many as 342 fewer new medication approvals in the next two decades – in addition to driving up launch prices for new products.
This even went too far for some House Democrats, with three members voting against the legislation in committee.
As I’ve indicated, this reckless tax-and-spending plan comes just over a year after we were experiencing one of the most prosperous economies in decades.
Before the pandemic, a combination of reduced regulatory burden and pro-growth policies helped to create one of the strongest economies in our lifetimes.
We should be focused on policies that will get us past this pandemic and back to the strong and inclusive economic growth we were experiencing, rather than taking advantage of a prolonged pandemic to reimagine America as a welfare state.
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